If the Fed is concerned about a possible recession, it ________ the federal funds rate, which ________ the quantity of reserves and ________ the amount of bank loans
A) raises; increases; increases
B) lowers; increases; increases
C) raises; decreases; decreases
D) lowers; increases; decreases
E) lowers; decreases; decreases
B
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Inferior goods are those for which demand increases as
A) the price of a substitute falls. B) the price of a substitute rises. C) income decreases. D) income increases.
A price ceiling is:
A.) A lower limit on the price of a good. B.) Above the equilibrium price. C.) An upper limit on the price of a good. D.) A limit on the price of goods sold abroad.
Say the supply of a product falls while the demand stays the same. This causes the free market ________
a. price to increase and equilibrium quantity to increase b. price to increase and equilibrium quantity to decrease c. price to decrease and equilibrium quantity to increase d. price to decrease and equilibrium quantity to decrease
According to the kinked demand curve theory of sticky prices, in an oligopolistic market:
A. a price decrease by one firm will not be followed by the other firms. B. the kinked demand curve is inelastic in the upper portion and elastic in the lower portion of the curve. C. the kinked demand curve is elastic in the upper portion and inelastic in the lower portion of the curve. D. a price increase by one firm will be followed by the other firms.